Bookkeeping is the process of tracking and recording all financial transactions that occur within a business every day. These transactions are organized into journals as credits and debits. There are a couple of different methods of recording transactions, including cash-basis versus accrual-basis and single-entry versus double-entry. Bookkeeping used to be done manually on paper, but now is typically done electronically using accounting software such as QuickBooks Online or Xero Accounting Software, as it automates part of the process.
The simplest form of bookkeeping is when you use cash-basis accounting and follow the single-entry method. Cash-basis accounting is the recording of transactions when money exchanges hands. This means if you sell something on credit, you do not record it until you receive payment. Single-entry bookkeeping is when you only record the transaction once, just like when you are utilizing a checkbook. On the other hand, double-entry bookkeeping is when you keep more detailed records and enter every single transaction twice, once as a debit and once as a credit. Accrual accounting is when you record the transaction when it happens, so if you sell on credit, you note the sale at that time and add another record once the payment is received.